86,335 research outputs found

    The Impact of Information Technology Investment on Firms Performance

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    Purpose: The aim of this study is to examine the relationship between information technology investment and firm’s performance among Malaysian PLCs.  Design/methodology/approach: , The analysis employed panel data approach in which it relied on annual report of companies listed in Bursa Malaysia. This study covered a period between 2009 and 2012, therefore only companies listed within this stipulated period were included in the analysis. Findings: Results of the regression estimation of the dependent variables, based on random effect model shows a high significant on return of investment score. The control variables of firm size and industry did not have a statistically significant influence on the test results. However, IT investment is statistically not significant with return on asset, as there is no relationship between IT investment and ROA. Research limitations/implications: First, this study is using a limited sample data as an established large sample data set in relation to IT investment information in PLC’s is still unavailable. Secondly, this study is unable to investigate a time lag effect due to the limited information available in the annual reports. State your limitation here. Thirdly, the IT investments are divided into two asset classes, but there is several ways to characterize the ?rm’s investment allocations. Practical implications: This study substantiates the need for PLCs to increase their IT investment as the company grows. Information technology strategies need to be developed at par with company’s future direction.   Originality/value: This study is one of the first empirically studies done in investigating the relationship between IT investment and firm financial performance in Malaysian PLC’s which is using the public listed companies’ secondary data. Paper type: Research pape

    A Dynamic Capabilities Approach to Understanding the Impact of IT-Enabled Businesses Processes and IT-Business Alignment on the Strategic and Operational Performance of the Firm

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    For the past two decades, researchers have sought to understand how IT investment leads to organizational success. However, this has proven to be an elusive goal. We posit that a new perspective is needed to better understand IT investment. We must examine how the investment is enacted and reflected within the firm. We will argue that investment is enacted within the technology resources and corresponding business processes and reflected in the IT-business alignment. Based on the literature within Dynamics Capabilities Theory and IT-Business Alignment, we will propose a theoretical model that seeks to understand the impact of IT-enabled business processes and IT-business alignment on the strategic and operational success of a firm and whether the impacts experience a lag effect. Using data from fifty-eight European firms over a two-year period, we will build a structural equation model to test our theoretical model. The results indicate that alignment is important for strategic and operational success in year 1 but not in year 2. Furthermore, of the two, alignment has a stronger impact on strategic than operational success. In contrast, business process performance has an impact on organizational performance in year 1 and year 2. For both years, the impact on operational success is stronger than the strategic one. We also notice that the impact of business process performance on operational success decreases between year 1 and year 2, whereas the impact on strategic success is stronger in year 2 than in year 1

    The effects of corporate governance mechanisms on the financial leverage–profitability relation

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    Purpose This paper aims to investigate the moderating effects of corporate governance mechanisms on the financial leverage–profitability relation in emerging market firms. Design/methodology/approach The paper examines the impacts by estimating the empirical model in which a firm’s accounting profitability is a dependent variable, while financial leverage, board size, board independence, CEO duality, CEO ownership, state ownership and the interaction variables are predictors. The paper uses the panel data set of 295 listed firms in Vietnam in the period 2011-2015 and two key econometric methods for panel data, namely, the two-stage least square instrumental variable and general moments method. Findings The paper finds the evidence for the significant and positive effect of board size, board independence and state ownership on the financial leverage–profitability relation. The effect of CEO duality on the financial leverage–profitability relation tends to be negative, and the impact CEO ownership inclines to be positive, although both of them are statistically insignificant. The results are consistent across different estimation methods. Originality/value This paper is the first investigating the moderating effect of various corporate governance mechanisms on the financial leverage–profitability relationship in emerging market firms

    Debt financing and firm performance: The moderating role of board independence

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    This article investigates the moderating role of board independence in the relationship between debt financing and performance of emerging market firms. We have used an empirical model in which the firm’s accounting profitability is a dependent variable and the independent variables are debt financing, board independence, the interaction variable made of debt financing and board independence as well as various control variables. Our analysis is based on a panel data set of 300 listed firms in Vietnam between 2013 and 2017. Our study finds that debt financing has a significantly negative effect and that board independence reduces the adverse impact of debt financing on accounting profitability. Our results are consistent across different estimation models and methods

    Effects of R&D intensity on firm performance in Taiwan’s semiconductor industry

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    This study examined the impact of research and development (R&D) investment behaviour on the corporate performance of the Taiwanese semiconductor industry, which faced the economic downturn caused by the global financial crisis of 2008, for the period 2005–2016. A dynamic panel data model was used to empirically analyse the impact of R&D intensity on business performance. A generalised method of moments estimator was adopted to avoid endogeneity problems caused by adding dynamics to the model. Further, the model was used to explore the impact of the lag effect of R&D investments on business performance. It was found that significant R&D investments in a given period may reduce business performance in the same period and continue to influence it in the next few periods, thus indicating the presence of a positive and lagged effect of R&D investments in the high-tech industry. Firm size was also found to be positively correlated with business performance, that is, the larger the firm size, the greater is the use of resources for R&D, which, in turn, leads to more sophisticated technologies and profitable outcomes, forming a positive cycle. This indicates that R&D expenditures affect firms’sustainable management

    PRODUCTIVITY SPILLOVERS FROM MULTINATIONAL ACTIVITY TO LOCAL FIRMS IN IRELAND. OECD PRODUCTIVITY WORKING PAPERS No. 16, November 2018

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    As well as their direct effects on output and employment, the attraction of foreign direct investment is sometimes argued to provide further economic benefits through spillover effects that potentially increase the productivity performance of domestic firms. Empirical evidence on these indirect effects has however tended to be mixed. This paper uses Irish firm-level data on both manufacturing and services firms to re-examine and update evidence on intra-industry and intra-region spillovers and then extends the previous research by examining if spillovers are more likely to occur through supply chain linkages. In addition, we consider the heterogeneity of investors and allow the spillover effects to differ for foreign affiliates owned by EU and non-EU based parent companies. Finally, we examine the role of domestic firms’ absorptive capacity in conditioning the effects of spillovers from multinationals on their productivity. Overall, we find limited evidence or a negative link between the presence of foreign-owned firms and the productivity of domestic firms in the same industry or the same region. Examining forward and backward linkages through supply chains indicates that on average, selling to foreign-owned firms had a positive effect while buying from foreign owned firms had a negative effect on the average productivity of domestic firms. Finally, considering the absorptive capacity of domestic firms and allowing the spillover effects to differ depending on the origin of the parent companies, we find that the positive productivity spillovers come from supply chain linkages between domestic firms investing in R&D and foreign affiliates of multinationals with headquarters based outside the EU

    Estimating an SME investment gap and the contribution of financing frictions. ESRI WP589, March 2018

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    In this paper, we use firm-level survey data to explore the determinants of SME investment activity and the extent to which observed investment is in line with that suggested by economic fundamentals. In contrast to previous literature which has focused on whether investment gaps exist at a more aggregate level, we find evidence that for SMEs actual investment is below what would be expected given how companies are currently performing. The estimated magnitude of this investment gap is economically meaningful at just over 30 per cent in 2016. We explore the extent to which the gap is explained by financial market challenges such as access to finance, interest rates, and the availability of collateral. Financing frictions are found to account for a moderate share of the overall investment gap (between 10 per cent and 20 per cent of the gap)

    Determinants of Environmental Expenditure and Investment: Evidence from Sweden

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    This paper provides new evidence on the determinants of environmental expenditure and investment. Also, by employing the Heckman selection models, we study how environmental expenditure and investment by Swedish industrial firms responded to the national and international policies directed to mitigate air pollution during the period 1999 through 2008. We find that firms that use carbon intensive fuels such as oil and gas are more likely to spend to and invest in the environment. Larger, more profitable and more energy intensive firms are more likely to incur environmental expenditure/investment. Overall, an important finding of our econometric analysis is that environmental regulation both on the national and international levels are highly relevant motivations for environmental expenditure and investment.environmental expenditure and investment; environmental policy; EU ETS; panel data
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